SANJAYOVACHA | Globalisation’s Unravelling and Fall of the ‘Davos Man’ | Sanjaya Baru

It is perhaps symbolic of the times we live in that in the midst of the growing criticism of economic globalisation in the developed West, and all that it has come to imply, an axe has fallen on a key apostle of the faith. Last week the board of trustees of the World Economic Forum (WEF) asked its founder chairman, Klaus Schwab, to step down amidst charges of corruption and financial and ethical “misconduct”. Schwab and wife Hilde have long been accused by former WEF staff of wrongdoing but a whistleblower put out enough for the board to finally ask him to go.

The WEF is known around the world for its hosting of the annual Davos Forum in Switzerland and several country specific forums around the world. In India the WEF has collaborated with the Confederation of Indian Industry (CII) to host the India Economic Summit. Founded by Schwab in 1971, and originally called the European Management Forum, WEF came into prominence after the end of the Cold War when economic liberalisation and globalisation became the new mantras.

The re-integration of China and India into the global economy and the rise of the so-called “emerging markets” made Davos the forum at which investment-seeking countries met with leaders of multinational corporations and heads of government of investment opportunity-seeking economies and businesses.

Prime Minister P.V. Narasimha Rao was the first Indian head of government to address the WEF at Davos in 1992. He used the opportunity to seek foreign direct investment and inform the captains of global business of the “new turn” in India’s economic policies. WEF’s success was defined by Schwab’s ability to bring together not just global business leaders and heads of government but also intellectuals, Nobel Prize winners, writers and glamourous celebrities.

The annual gathering at Davos was a clever con game. Schwab and his team managed to use the off-season for tourists, in end-January, to literally lock up a thousand guests and delegates in a remote Swiss town and make them feel exclusive and special given the mix of people around.

How high profile WEF became is testified to by the fact that the board of trustees is a global who’s who -- with names on it like Al Gore, former US vice-president, Tharman Shanmugaratnam, President of Singapore, Ngozi-Ikonji Iweala, former finance minister of Nigeria and currently director-general of the World Trade Organisation, Kristalina Georgieva, managing director of the International Monetary Fund, the former chairman of Nestle, Indian billionaire Mukesh Ambani and Ajay Banga, president of the World Bank.

With time the Davos jamboree became a subject of sociological analysis. In a 2004 essay a Harvard historian, the distinguished Samuel Huntington, wrote about the “Davos Man” -- a people who “have little need for national loyalty, view national boundaries as obstacles that thankfully are vanishing, and see national governments as residues from the past whose only useful function is to facilitate the elite’s global operations”.

Ironically, in his earlier avatar as a businessman, Donald Trump was one such Davos Man, with global business interests and friends who have global business interests, but in his new avatar as a politician, Mr Trump speaks the language of the “anti-Davos” men. The growing anger against globalisation was bound to catch up with Davos and in the fall of Klaus Schwab the anti-globalists have downed a high-profile symbol of all that they are against.

Schwab’s misdemeanours, as widely reported in the Western media, include using WEF money for personal use, including in-room massages in hotel rooms, funding a campaign for his nomination to a Nobel Prize, and leading the high-profile life that he and wife Hilde led -- living in luxury homes and travelling first class around the world.

Worse, Schwab has been accused of manipulating the WEF global competitiveness rankings to curry favour with select governments. It may be recalled that IMF managing director Kristalina Georgiva (a WEF trustee) was accused, when she was at the World Bank, of manipulating the Bank’s “Ease of Doing Business” index to favour China and India. While the couple have denied all allegations, the fact is that the WEF’s high- profile board of trustees did ask Schwab to step down.

In 2017, even as Western leaders, especially President Trump, were critiquing globalisation in their speeches at Davos, China’s President Xi Jinping became the first Chinese head of state to turn up at Davos and deliver a robust defence of global economic integration and the need for keeping national doors open to international trade. In the current global environment, it remains to be seen how much interest the West and the Rest would continue to have in meeting at Davos.

In 2002, China had launched its own Boao Forum for Asia that has grown from strength to strength in terms of participation and level and quality of organisation. Over 2,000 delegates from over 60 countries now attend the Boao Forum, held on Hainan island. Its’ focus has been largely limited to Asia and so it remains to be seen if Boao Forum would try to go global, edging out Davos. After all, it is China that speaks the language of the Davos Man, of open borders and global business, while the West, especially the United States, is shutting its doors.

Over the past quarter century many high-profile Indians had become Davos regulars. They must be dismayed and disappointed to learn of the charges against Schwab. It was the CII, under the leadership of Tarun Das, that built the initial bridge to WEF. Between Schwab and Das the WEF-CII teams managed to get a large number of Indian business leaders, bureaucrats, politicians and business journalists on to the Davos bandwagon.

Indian companies and governments blew up thousands of dollars to indulge the fancy of their CEOs and ministers who wanted to be seen, but not often heard, at Davos. The civil servant N.K. Singh, a WEF regular, became a Davos celebrity hosting a dinner for a mix of Indian and global guests. Even if one did not manage to get into the WEF meeting venues, just sitting at “Nandu Singh’s table” was good enough for many a “Davos Man” to trudge up the dirty snow tracks around Davos.

The writer is an author, a former newspaper editor and adviser to Prime Minister Manmohan Singh